Commodities

Gold slips to five-week low ahead of U.S. non-farm payrolls data

Gold slips

The prices of gold slid to the lowest level in five weeks on Thursday, pressured by a strengthening dollar ahead of U.S. non-farm payrolls data on Friday.

Spot gold changed slightly at $1,207.38 per ounce after going as low as $1,205.50 earlier in the session.

U.S. gold futures eased 0.2 percent to $1,207.00 per ounce.

Investors are looking forward to non-farm payrolls data for February on Friday as a way to measure the economy of the U.S. after Federal Reserve Chair Janet Yellen said last week the central bank was on track to increase rates if the jobs and inflation data held up.

Her comments were seen as ensuring plans for an increase at the Federal Reserve’s meeting at March 14-15.

"If the (nonfarm payroll) data does come in better than market expectations, it will drag gold prices further," OCBC analyst, Barnabas Gan said.

"But with fund futures fully pricing in the rate hike story, I'd presume gold will just be supported at the $1,200 handle into next week, whereby the actual rate hikes will come in."

According to CME Group’s FedWatch program, interest rates futures implied traders saw an 86 percent chance of a rate hike next week, compared with an 82 percent increase at Tuesday’s close.

Higher rates tend to pressure gold prices because they increase the opportunity cost by holding non-yielding bullion while boosting the dollar.

The dollar index which measures the dollar against a basket of six major peers, went up 0.1 percent to 102.14.

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